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Strategies & Market Trends : Option Strategies

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From: Elroy	3/1/2023 7:50:36 PM
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Ok, this thread isn't terribly active, but ..... I got an option question. Anyone have an idea about this question..... I am short UAN March $115 puts, $140 puts and $150 puts. I will probably roll them all forward (ie, buy back the $115 Mar puts, and go short the equivalent later dated $115 UAN Puts) to May or perhaps even August. UAN is going to trade ex-dividend on a $10.50 distribution on this Friday. The March puts incorporate this fact. In other words, although UAN today is $117 the March puts are trading as if UAN was $106.50 (because they expect the units to drop by $10.50 between Thurs and ex div date Friday. The question........do you think it's better to roll them forward tomorrow, before the big distribution, or roll them forward sometime after tomorrow and before March expiration? Both months are trading as if UAN is going to decline by $10.50 on Friday at the open. But I wonder whether it's better to roll forward options NEAR the money (the March $115 puts now are very close at the money) or roll forward options that are deep in the money (after Friday, all of the put contracts I am short should be $10.50 more in the money). Anyone have any opinion on that odd question?

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